Opportunity Day 3Q19 Result November 11, 2019 1 Disclaimer This - - PowerPoint PPT Presentation

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Opportunity Day 3Q19 Result November 11, 2019 1 Disclaimer This - - PowerPoint PPT Presentation

Opportunity Day 3Q19 Result November 11, 2019 1 Disclaimer This Presentation (The Presentation) has been prepared by Home Product Center Plc. The Presentation is private and confidential and is being made available for information


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Opportunity Day 3Q’19 Result

November 11, 2019

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Disclaimer

This Presentation (The “Presentation”) has been prepared by Home Product Center Plc. The Presentation is private and confidential and is being made available for information purposes

  • nly. Accordingly, this Presentation may not be copied, reproduced or redistributed to any
  • ther person save with the prior written permission of the Company. By accepting this

presentation, each recipient accepts and agrees with the Company that it will comply with, and that it will procure that any other person to whom it provides this Presentation complies with, the Terms set out herein and all applicable laws and regulations. This Presentation is not a prospectus and is not intended to and does not constitute offer or solicitation of any offer in respect of securities. It does not constitute any recommendation or Investment advice, not intended to form the basis of an investment decision and should not be relied upon for such purpose. This Presentation has not been approved by any regulatory

  • authority. Neither the Company or their respective advisers accepts any liability whatsoever

arising in connection with the distribution of this Presentation to recipients hereof. This Presentation is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly to any other person or published, in whole or in part, for any purpose. No part of this presentation may be reproduced or taken

  • r transmitted. The distribution of this presentation in other jurisdictions may be restricted by

law, and persons into whose possession this presentation comes should inform themselves about, and such restrictions. By accepting this presentation you agree to be bound by the foregoing restrictions.

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HomePro is the leading home improvement retailer in Thailand. HomePro’s products cover 40,000 items HomePro operates 93 stores nationwide HomePro provides complete service as One Stop Shopping

About HomePro

Listed in the Stock Exchange of Thailand (SET - HMPRO, Bloomberg – HMPRO:TB)

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Agenda

Sustainability Development 3Q’19 Financial Results

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Business Outlook

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Holds 99.99% of total shares Objective to manage rental space and provide utilities services to tenants. Holds 100% of total shares Objective to operate a retail business in Malaysia. Holds 99.99% of total shares Objective to operate retail business under trade name “Mega Home”. Holds 99.99% of total shares Objective to operate the warehousing and distribution.

Corporate Group Structure

Home Product Center Plc. : Operating HomePro in Thailand

Market Village Co., Ltd. DC Service Center Co., Ltd. Mega Home Center Co., Ltd. Home Product Center (Malaysia) Sdn. Bhd.

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Store Footprint

Greater Bangkok : 27 stores Upcountry : 57 stores Greater Bangkok : 8 stores Upcountry : 1 store Greater Bangkok : 2 stores Upcountry : 10 stores Malaysia : 6 stores

Data as of September 30, 2019

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TFRS 15 Adoption - Revenue from Contracts with Customers

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Home Service income Home Service income Logistic cost Rental cost Inventories Reserve Logistic cost Rental cost

Rental and service income Other income Cost of Sales Cost of rental and service Selling, distribution and service expenses Administrative expenses

Cost of Home Service Cost of Home Service Inventories Reserve

Revenue Expense

Before After Adoption TFRS15

(No Impact on Total Revenue) (Impact on Gross Margin)

(No Impact on EBIT)

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Unit : MB 9M’19 % of sales 9M’18 % of sales Var % change Sales

47,046.0 100.0% 45,720.2 100.0% 1,325.8 2.9%

Rental and Service Income

1,951.9 4.1% 1,748.5 3.8% 203.4 11.6%

Other Income

1,496.0 3.2% 1,390.3 3.0% 105.7 7.6%

Total Revenue

50,493.9 107.3% 48,859.0 106.9% 1,634.9 3.3%

Cost of sales

34,549.6 73.4% 33,766.5 73.9% 783.1 2.3%

Gross profit

12,496.4 26.6% 11,953.7 26.1% 542.7 4.5%

Cost of Rental and Service

1,131.4 2.4% 1,050.4 2.3% 81.0 7.7%

Total Expenses

9,040.2 19.2% 8,912.2 19.5% 127.9 1.4%

EBIT

5,772.7 12.3% 5,129.9 11.2% 642.9 12.5%

Finance Cost

315.5 0.7% 291.7 0.6% 23.8 8.2%

Tax

1,028.5 2.2% 911.3 2.0% 117.1 12.9%

Net Profit

4,428.7 9.4% 3,926.8 8.6% 501.9 12.8%

Depreciation

2,192.5 4.7% 2,280.3 5.0% (87.8) (3.9%)

EBITDA

7,965.2 16.9% 7,410.2 16.2% 555.0 7.5%

P & L Summary

Data as of September 30, 2019

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Unit : million baht

47,965 52,513 56,928 59,888 61,581 39,371 40,861 15,401 15,220 2014 2015 2016 2017 2018 9M'18 9M'19 3Q18 3Q19

Sustainable Sales Growth

Sales income was up by 4.2%, which was driven by same store sales growth of HomePro and HomePro in Malaysia as well as sales from new stores of HomePro, Mega Home, and HomePro in Malaysia.

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Nine-month period’s sales income was driven by same store sales growth of HomePro and Mega Home as well as sales from new stores of HomePro.

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7.6% 11.6% 3,244 3,730 4,216 4,346 4,469 6.8% 7.1% 7.4% 7.3% 7.3%

3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

  • 1,000

2,000 3,000 4,000 5,000 6,000

2014 2015 2016 2017 2018 1,390 1,496 495 489 1,749 1,952 598 666 9M'18 9M'19 3Q'18 3Q'19

Unit : million baht Others % to Sales Rent & Service

  • Nine-month period’s other income was up due to the increase of income from promotional

activities with suppliers, interest received, and miscellaneous income.

  • Nine-month period’s rental and service income was up from higher rental income from Market

Village and leasable areas of HomePro’s stores, including areas for organizing promotional events with suppliers, as well as income from “Home Service”.

Other Income

% to sales

11.4% (1.1%) 7.1% 7.6%

Unit : million baht

6.9% 7.3%

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11,119 12,283 13,141 13,750 14,084 23.2% 23.4% 23.1% 23.0% 22.9%

20.0% 20.5% 21.0% 21.5% 22.0% 22.5% 23.0% 23.5% 24.0%

  • 5,000

10,000 15,000 20,000 25,000

2014 2015 2016 2017 2018

Nine-month period’s of SG&A increased were mainly driven by the in personnel expenses, rental cost, utility cost, merchant fees, maintenance cost, and marketing expense. However, SG&A as a percentage of sales has marginally improved, resulting in the decrease from 19.49% in the previous year to 19.22%.

SG&A Expenses

% to sales Unit : million baht Unit : million baht

1,445 1,365 501 433 1,050 1,131 351 346 7,468 7,675 2,536 2,572

9M'18 9M'19 3Q'18 3Q'19

Sales Related % to Sales Admin Expense Rental and Home Service related

19.7% 19.7% 19.5% 19.2%

After Adoption TFRS15

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Nine-month period ’s Gross profit margin as a percentage of sales has increased from 26.15% in previous year to 26.56% due to change in product sales mix of general merchandise and the enhancement of directly sourced private-label goods, as well as the continuous efficiency improvement in product purchase planning of HomePro, Mega Home, and HomePro in Malaysia.

Profitability Ratio

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GP EBIT EBITDA

% GP % EBIT % EBITDA

9.4 9.8 10.7 11.9 11.2 12.3 11.6 12.7 14.6 14.9 15.9 16.9 16.2 16.9 16.5 17.6 26.0 25.5 26.5 27.5 26.2 26.6 26.5 27.1 2015 2016 2017 2018 9M'18 9M'19 3Q'18 3Q'19 Unit : % of Sales

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NPAT & EPS

Nine-month period’s NPAT grew by 12.8% and NPAT as a percentage of sales increased from 8.6% in 9M’18 to 9.4% in 9M’19. Earnings per share (EPS) were Baht 0.34 in Q3’19, up 12.8% YoY.

FY 2015 2016 2017 2018 EPS 0.27 0.31 0.37 0.43

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3,499 4,125 4,886 5,613 3,927 4,429 1,366 1,482

6.7% 7.2% 8.2% 9.1% 8.6% 9.4% 8.9% 9.7%

2015 2016 2017 2018 9M'18 9M'19 3Q'18 3Q'19 Unit : million baht

% to sales

3Q’18 3Q’19 0.10 0.11 9M’18 9M’19 0.30 0.34

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30 Sep 2019 31 Dec 2018 Var % change Cash & Deposit 2,314.88 6,237.75 (3,922.87) (62.89%) Inventory 9,838.02 10,245.45 (407.43) (3.98%) Land Building & Equipment 35,742.66 35,398.78 343.88 0.97% Others 2,646.61 2,929.37 (282.77) (9.65%) Total Assets 50,542.18 54,811.36 (4,269.18) (7.79%) Financial Debt 14,388.65 17,262.22 (2,873.56) (16.65%) Account Payable 13,448.97 14,370.53 (921.56) (6.41%) Others 3,228.64 3,264.51 (35.88) (1.10%) Total Liabilities 31,066.26 34,897.26 (3,831.00) (10.98%) Paid-Up Capital 13,151.20 13,151.20

  • Share Premium

646.32 646.32

  • Retain Earnings

5,67840. 6,116.58 (438.18) (7.16%) Total Equities 19,475.92 19,914.10 (438.18) (2.20%) Unit : million baht

Balance Sheet at a glance

Data as of September 30, 2019

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HomePro only (20) (21) (17) (19) (17) Including subsidiaries (17) (18) (14) (13) (12) AP AR INV 2 2 2 1 1 72 73 83 79 74 94 96 99 99 92 2015 2016 2017 2018 9M'19 Unit : Days Net Cash Cycle (days) 2015 2016 2017 2018 9M’19

(After)

Working Capital

*HomePro Only

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Remark : excluding consignment goods

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ROIC ROA ROE 7.7 8.4 9.5 10.2 11.2 21.5 24.0 27.1 28.2 30.0 12.7 14.5 16.3 18.2 20.4 2015 2016 2017 2018 9M'19 Unit : %

ROIC ROA ROE

ROE – ROIC - ROA

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* Annualized

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Agenda

Sustainability Development 3Q’19 Financial Results Business Outlook

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Our Sustainability Progress

Ou Our way ay of

  • f

‘SUSTAINABILITY’

is s to

  • be

be th the mos

  • st

t sus susta tain inable le retu return com company

Product & Service Our Associate Operational Efficiency Supply Chain Management Society & Community

38%

  • f sales mix came from

Eco Choice Product

81%

Employee Engagement Level

1,335

Tao-Kae-Noi teams are ready to service

60% Of suppliers acknowledged

code of conducts

32% Of energy reduced

from based year

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Agenda

Sustainability Development 3Q’19 Financial Results Business Outlook

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CCI CPI Source : The center for economic and business forecasting, UTCC.

Consumer Confidence hits 39-month low

CPI

Consumer confidence index dropped to 72.2 points last month in September from 73.6 points in August, marking the lowest level since July 2016. The index fell for the seventh consecutive month despite the government’s economic stimulus measures. Consumers were concerned about the local political instability, slow recovery of Thai economy and purchasing power, and uncertain global economic prospects due to the impact of Brexit and mounting trade war between China and the US. Furthermore, the index has been dampened by concerns on several low crop product prices, reflecting cautious spending in the third quarter.

CCI

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79.9 80.9 80.1 81.3 82.2 83.2 82.3 81.3 80.5 79.4 80.7 81.3 80.5 79.2 77.7 76.4 75.0 73.6 72.2 0.8 1.1 1.5 1.4 1.5 1.6 1.3 1.2 0.9 0.4 0.3 0.7 1.2 1.2 1.2 0.9 1.0 0.5 0.3

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Margin expansion through Private Label

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Over 3,000 items Over 36 Private Brands Quality and worthiness Continuous development

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2019 Store Expansion Plan

2019 New stores Total (stores)

84 9 14 6

Our stores in 2019

Malaysia

2Q

Charansanitwong 17 May

  • Upcountry
  • 3Q

Samyan Mitrtown

  • 20

Sep

  • Mukdahan

30 Aug

  • 4Q

Rayong (BanChang) Nov Bangna - Trad Dec 2 1

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2 *Excluding Store Relocation of Fashion Island Branch

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2019 CAPEX 5,500–6,000 MB for new stores expansion of all business units, including an improvement of distribution center.

2019 Further Funding Rapid Growth

Source of Fund 2019 83% 17%

CF from Operation 5,000 MB

Net Debt 2,600-3,000 MB

(exclude refinancing 3,500 MB)

Financial D/E Ratio

0.85 0.98 0.81 0.87 0.74

  • 4,000

8,000 12,000 16,000 20,000 2015 2016 2017 2018 9M'19 Financial Debt D/E Ratio

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Marketing Highlight

HomePro Expo #30

The event much anticipated by all home lovers,

  • ffering wide range of brands from more than 300

manufactures and distributors, home service and innovation, with special deals from well-known banks.

15 - 24 November 2019

HomePro Fair @Khon Kaen

An 11-day long exhibition with fun activities, special shows, and food trucks for everyone to come visit and enjoy.

18-27 October 2019

70

Off

%

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Up to

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Q & A

Contact us

Tel +662-832-1416 Email : IR@homepro.co.th